Making Sense of Used-Car Warranties

Used cars tend to have fewer warranty options than their brand-new counterparts, but the policies can be just as daunting to understand. For one, they rarely mirror a new car's powertrain, bumper-to-bumper or accessory policy. Instead, they can be a mixed bag of coverage.

Most policies carry deductibles, partly because automakers don't technically classify them as warranties. Like most insurance policies, many of these so-called warranties are strictly contractual to minimize the company's liability.

Still, most consumers see little difference between used-car policies and a new-car warranty: These policies can cover anything from the powertrain to the electrical system to audio accessories, though some will only pay a portion of the repair costs. To better understand these warranties, we checked a number of used-car policies at dealerships and online, and we consulted with a few experts. Here's what we found.

Basic used: In most states, dealerships and private parties are allowed to sell a car as-is, without a warranty. Dealers will sometimes offer a minimal warranty to help sell the car. These policies are rudimentary, offering to pay some percentage for example, 50 percent of parts and labor for specific components that fail. They have a limited shelf life, though, and often expire anywhere from 30 days to a year after the purchase of the car.

Extended-length: Often called service contracts, these programs are similar to extended-length warranties that are available for new cars. They protect used-car purchasers from costly failures down the road, in some cases up to 100,000 original miles. Policies come in all shapes and sizes; some cover only the most serious engine failures, while others include everything short of regular maintenance. Basic policies usually carry higher deductibles than pricier ones, putting more of the out-of-pocket expense on the consumer.

Certified pre-owned: In addition to the balance of the original bumper-to-bumper and powertrain warranties, nearly all certified pre-owned vehicles carry some extra coverage to provide some extra appeal. Programs generally include longer powertrain coverage, in some cases going as long as 100,000 original miles. Some automakers also have bumper-to-bumper policies that cover most components for a short while after purchase. Many policies have a nominal deductible, and virtually all of them provide roadside assistance.

Implied: Implied warranties are required in a handful of states that don't allow a used car to be sold as-is. In such situations, sellers can only sell what could reasonably be called a motor vehicle, meaning it has to run. In such cases, if the buyer drove the car for a week and the wheels fell off, and a mechanic could prove that whatever caused the failure existed at the time of sale, the seller might be obligated to make repairs.

Aftermarket accessories: Aftermarket accessories range from high-tech stereos to high-boost turbochargers. They're seldom covered by new-car warranties, and some of the most invasive add-ons can void a car's original warranty. In response, aftermarket manufacturers frequently offer their own warranties; read them carefully, as they tend to cover only the aftermarket component, not any original parts that might be affected.

Replacement parts: Parts bought from a dealership to replace defective ones generally carry limited warranties, sometimes with mileage limits. Some automakers have separate policies for replacement batteries, and those policies can last considerably longer.